Getting abroad education loan Studying abroad is a dream of many students because of the research-based curriculum taught by experienced teachers and also proves great to be for their career trajectory. But not everyone opts for this opportunity readily due to a lack of funds. Generally, the cost of fees and total living expenses is on the higher side and is not affordable for many families. But nowadays, there are many financing options for the student community to avail themselves and study abroad at the university of their choice.
Abroad education loan to study abroad
Education loans for students are now offered by both public and private banks for studying abroad. If one knows the entire process of applying for loans, then it is not a difficult task at all. The information is usually present on the website of banks and is available to the general public. The following information should be clear to students before applying loans for students-
- While applying for an education loan, the student is the borrower and parents become the co-borrowers. Currently, the limit of loans provided by Indian banks for study abroad purposes is a maximum amount of Rs 20, 00, 000.
- This amount covers the total tuition fees, hostel fees, any library or lab charges, the amount for purchasing books or any other kind of instruments if required, expenses incurred in traveling, and the purchase of a laptop if mentioned in the course.
Eligibility Criteria for education loan for abroad students-
Before beginning the process, students should be clear about whether they are eligible for the loan or not. The generic eligibility criteria that is followed by the banks are –
- Student should be an Indian citizen
- Student should have an excellent academic record
- The course selected should be technical/professional. Students must go for a course that is job oriented
- Students should have an acceptance letter from the university abroad
- Students must be above 18 years of age otherwise parents will have to apply for the loan in their name.
Eligibility for Courses for a loan for students
- For Graduation: technical or professional courses that are job oriented offered by credible universities
- For Post-graduation: MBA, MS, or other similar professional courses
The general rule for availing of education loans for students is to submit some form of security that the bank can hold with itself or sell in case of non-repayment of the loan. In cases where the loan for students is only up to Rs 4 lakhs then no security is require.
When the amount of loan is between Rs 4 lakhs to 7.5 lakhs then a guarantee from a third party is a must. from a suitable third-party guarantee is in need.. When the education loan for students is between Rs 7.5 lakhs to 20 lakhs, then security has to be provided to the bank in the form of any immovable property in the form of a building or a land, FD in the name of parents or student, government bonds or any policy, shares, gold etc.
In case of third party intervention, the guarantor is liable to pay in case of any default. Should you default the guarantor will have a legal obligation to pay up thus putting the onus on them and morally on the student and their parents. In cases where the education loan for students is sanction in the name of parents then the guarantee is return back from the student.
In addition to this, students have to furnish offer or acceptance letter from the university which clearly states that they have received admission in their university and the whole timeline of fees payment. Banks also require students to show the mark sheets of their last academic record as a proof of their excellent academic record. Different banks have different requirements and students have to follow the standard operating procedure to avail the education loan for abroad.
Some rules to know before getting abroad education loan
The repayment of the loan starts after the student completes their course. In case where the student secures a job, then the repayment will start after one 6 months or 1 year depending upon the bank. If a student fails to secure a job, then also the repayment will start.
Education loan for students has to be payable back in 5-7 years. The maximum time period for repayment is up to 10 years and if the student is unable to complete. The course within the stipulated time then an extension of 2 years is provided.
Once you have decided to study abroad and take an education loan for students then the first thing you have to check is whether your choice of course or university is recognized by the bank or not. Then you need to make an estimate of the amount required and discuss the same with your family. Find out the best rates by comparing all the options online through the website of banks.
It will be best if you visit the branches on your own and figure out all the details. And ask all the questions you have in your mind. Be absolutely sure about the timeline of repayment, and options of deferring payment if required. Once you find out about the lowest interest rates. Then take all the required documents to the bank and get them verified. Documents for availing of education loan for abroad include-
- Complete the loan application form
- All the mark sheets for school and college
- Offer letter by the university
- Passport-sized photographs
- Tuition fees as specified by the university
- Bank account statement of the borrower for the last six months
- Income tax return paper of 2 years
- Statement of assets of the Co-borrower along with proof of income like salary slips
Each student should follow all these steps to avail education loan for abroad in a hassle free manner.
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